2007 Legislation Attempts to Strengthen Resident Rights

By:  Bruce E. Stanton, CMRAA Corporate Counsel

Reprinted from CMRAA’s January 2008 Newsletter with their permission

In recent years, as the mobilehome stock continues to age and deteriorate, there has been an increase in attempts by park owners to require that mobilehomes be removed from the park as a condition of sale.  This is obviously a critical issue for California mobilehome owners, for it is well known that a mobilehome has virtually no value once it is removed from a park.  Regardless of age, mobilehomes derive almost all of their value from the “site” where they are located.  When a home is located on a landscaped site, with deck, awnings and porches attached, within a community which includes all of the customary common area improvements such as a clubhouse, a pool, roadways and exterior fences, that home derives a certain value from its location, and might be worth $50-100,000.00.  But move that same home out onto the street and advertise it for sale, and you would probably have to pay someone to haul it away.  Unless a mobilehome can be sold “in place”, on its rented space, it might be worth $0.  This is why we seldom see homes moved from their location at the time of resale.  And it is why the ability to sell a mobilehome “in place” is of vital importance to mobilehome owners.

Park owners might have legitimate reasons for requiring that a mobilehome be moved from the park when it is sold.  There could be significant code violations that make the home a hazard to the others within the community.  Or its condition might be so deplorable that it is beyond repair, and would negatively affect the equity value of the park and the other homes within the community.  Few would argue that in those circumstances, the home should be allowed to remain in the park.  Unfortunately, some park owners have another agenda.  They wish to frustrate or even block entirely the ability of a homeowner to sell, so that one of two things will happen:  (1) the selling homeowner will become so frustrated that they will agree to sell the home to the park for a few thousand dollars, thereby allowing the park to gain control of the space and either re-sell or rent out the home; or (2) the selling homeowner will not be able to fight the park, and will simply abandon the home, which allows the park to impose a warehouseman’s lien, foreclose upon the lien and gain control of the home for the same purposes.  Whenever a home is abandoned or given over to the park owner, the space is also “decontrolled” in most local jurisdictions which have a rent control ordinance, thus allowing the park owner to raise the space rent to what it deems to be a “market” rent.  This is also a prime motivator for some parks to prevent “in place” mobilehome resales.

 

The California legislature has recognized the need to protect homeowners from unfair park owner resale practices.  Civil Code section 798.73, which sets forth the conditions upon which a mobilehome can be removed upon resale, is fast becoming a key component of the Mobilehome Residency Law.  According to the statute, there is no automatic right of the park owner to require that a home be removed.  Rather, the park owner must bear the burden or showing either that (a) a mobilehome of certain age does not comply with health and safety codes following an inspection by the appropriate enforcement agency, or (b) that regardless of its age the home is “in a significantly rundown condition or in disrepair”, as determined by its general condition and acceptability to occupants.  Residents would hope that a park owner would follow this law in good faith.  But of course this is not always the case with some park owners.

I am currently involved in litigation which involves this very issue.  An elderly couple needed to move from their home so that they could move closer to their children.  But when they attempted to sell, the park owner refused to even provide a residency application to the proposed buyers, and informed the listing agent that the home could not be resold within the park.  When pressed to give a reason for the refusal, the park simply stated that the home was “too old”, and was inherently unsafe because it had been manufactured prior to a certain date.  The park did not rely upon an inspection to come to this conclusion, and refused to change its position even after the residents own inspections revealed that the home was not in bad condition.  Only after a lawsuit was filed did the park owner come up with the argument that it believed the electrical system was too old and unsafe to allow the home to be resold, since any home manufactured prior to 1973 is presumptively “unsafe”.  There was no advance notice of this argument which would have allowed the resident to quickly obtain an electrical inspection so as to prove the fitness of the home.  Nor was the park’s position proven by any electrical expert.  These poor residents continue to pay rent for a home that they cannot sell.

During the 2007 legislative session, only one significant amendment was made to the Mobilehome Residency Law.  Civil Code section 798.73 was amended to beef up protection for residents, and make it harder for a park to require removal of a mobilehome upon resale.  New subsection (e) to 798.73 now provides as follows:

(e) The management shall not require a mobilehome to be removed from the park, pursuant to this section, unless the management has provided to the homeowner notice particularly specifying the condition that permits the removal of the mobilehome.

This new language was added by AB 446 (Soto) for the purpose of requiring a park owner to state its position “up front”, so that the selling resident can address or contest any argument about the home’s condition.  Presumably this notice will need to be given by the park owner any time it is requested and most likely at the start of the listing process.  No longer can a park owner simply refuse to allow an “in place” resale without providing a reason in writing.  And if that reason turns out to be bogus, the park would either have to withdraw its position, or risk that it will be sued for a willful violation of Civil Code 798.73.  This would allow the selling homeowner to recover damages for any lost sale, as well as attorney’s fees (798.85) and a penalty of up to $2,000.00 for each willful violation (798.86).

It is important that residents understand and enforce their Civil Code rights.  No one else is going to do it for you, and you cannot routinely count upon a District Attorney or a City attorney to protect you.  If any CMRAA member believes that a park owner is unlawfully interfering with your ability to sell your home, you should contact CMRAA at once.  We are here to protect you and your investment to the best of our ability.

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Editors Note:  Mr. Stanton refers to litigation on behalf of an elderly couple.  In fact, CoMO-CAL published an article on this same couple in the NOVEMBER 2007 THE VOICE (Page 12-13).

Many mobilehome owners feel there are no problems in their parks.  However, we advise them to be aware.  When you go to sell your mobilehome, you may face many challenges.  The park may ask you to move your home, the park may require “upgrades” to remain in the park, the park may not approve your buyers, etc.

Mr. Stanton’s article is a MUST READ.  It       provides important information to anyone thinking about selling their home.

CoMO-CAL has published a three page article—The Seller’s Guide by Clay Harrison.  We will publish this again next month.  It, too, provides sellers important information.

We thank CMRAA and Mr. Stanton for the above article.  This is an example of one way our groups are working together.